Today: Investors get spooked by CEO Meg Whitman's gloomy outlook for Hewlett-Packard (HPQ); will they have the patience for her long-term turnaround plan? Plus, Apple (AAPL) rises on report of pending iPad Mini, and Netflix (NFLX) has more satisfied customers.

Whitman spoke to anaysts in San Francisco on Wednesday morning, hoping to bolster confidence that the troubled company is slowly but surely making progress in its recovery. But her warnings of significantly less earnings in 2013 and a four- to five-year turnaround spooked investors, sending HP shares down almost 13 percent, or $2.22, to close at $14.91. HP shares are now down more than 40 percent in 2012, CNN reported, making it the year's worst-performing stock in the Dow Jones Industral Average.

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"The big disappointment is stemming from the fact that things are expected to get worse" in fiscal 2013, RBC Capital Markets analyst Amit Daryanani wrote, according to Reuters. "The company intends to revert back to being a growth story. However, in the near term, earnings will get more challenging before they get better."

Whitman said the company was on the road to recovery, but was being hindered by the poor economy. "It's going to take longer to right this ship than anyone would like," Whitman said, according to the Merc's Steve Johnson. "I believe all of this is fixable, but it's going to take some time."

The question now is whether Whitman will be given that time; she is the Palo Alto tech giant's fourth CEO since 2005, and some experts believe her tenure is doomed unless she can show faster results.

"If she says (a four- to five-year turnaround), in four to six months she'll be fired," said Trip Chowdhry, a tech analyst with Global Equities Research told the Mercury News on Tuesday. "This is not running for office for another four years. I don't think investors have the patience to hope and pray and wait."

Apple rises on iPad Mini report

After a week of uncharacteristic declines, Apple shares started rallying Tuesday afternoon and continued rolling Wednesday, thanks to a report that the Cupertino tech giant has started production of a long-rumored 7-inch iPad.

Citing anonymous sources at Asian component makers, the Wall Street Journal reported that South Korea's LG and Taiwan's AU Optronics began production of 7.85-inch LCD screens for Apple last month. The so-called iPad Mini is expected to carry a signifncantly cheaper price tag than the $499 for the cheapest model of the 9.7-inch iPad, helping it stay competitive with 7-inch tablet rivals such as Google's (GOOG) $199 Nexus 7 and Amazon's $159 Kindle Fire.

The Journal report comes on the heels of Japanese blog's report earlier in the week that production on the iPad Mini had begun at a Brazilian plant, and a Ukrainian blog's supposed photos of the new device, taken from a factory in China. While the Journal report didn't cite a release date, Fortune last week reported the new device will likely be unveiled Oct. 17, and hit store shelves soon after, well in time for the Christmas retail season.

Business Insider CEO Henry Blodget told CNBC on Wednesday that the intoduction of a smaller iPad will benefit Apple, even though it may have smaller profit margins than some of the company's other fabulously popular products. They "need it because Amazon and Google and others have introduced a smaller tablet that is less expensive than the iPad, and that appears to be resonating very well with consumers. They're selling a whole bunch of them," Blodget said. "They're serving a purpose, so Apple wants to play in that game, and they should. That's a smart move."

Investors welcomed the iPad speculation, sending Apple shares up 1.58 percent, or $10.43, to close at $671.74.

Netflix: Happy customers lead to happy investors

Netflix shares soared Wednesday, bolstered by a report that found improved customer satisfaction.

A Citibank analyst's report found 48 percent of Netflix customers were "very or extremely satisfied," according to Bloomberg News, up from 45 percent in the first and second quarter of this year. A flood of angry customers dropped their subscriptions last year, after a price increase and ill-fated attempt to split its streaming and DVD rental businesses, but it appears Netflix has since won back hearts and minds. In the same survey, 37 percent of respondents said the service has gotten better over the past year, and 35 percent called Netflix "a top destination," up from 25 percent in the second quarter. Though its top rivals, Amazon and Google's YouTube, are also showing gains, Netflix is well positioned, the report said.

Shares in the Los Gatos streaming video company jumped 10.84 percent, or $6.12, to close at $62.58.

Among other Silicon Valley stocks, Mountain View-based LinkedIn rose 2.45 percent to $121.68 a day after announcing a new "follow" feature intended to increase user interaction, and San Francisco-based Salesforce.com and Mountain View-based Intuit (INTU) both rose more than 2 percent after anlysts' upgrades.

And the widely watched Standard & Poor's 500 index: Up 5.24, or 0.36 percent, to 1,450,99.

Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Follow Mike Murphy on Twitter at twitter.com/mmmmurf.